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S&P 500 Slumps as Covid Resurgence Rattles Stocks

Stock MarketsJul 19, 2021 03:46PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 plunged Monday as sharp fall in yields signaled fresh fears about the growth outlook at time when the Delta variant continues to spread.

The S&P 500 fell 2%, the Dow Jones Industrial Average fell 2.5%, or 852 points, the Nasdaq was down 1.4%.

"A plethora of macro uncertainty is now in investor crosshairs including pandemic / variant spread; reflation / inflation; future of CB policy; earnings; and geopolitical tensions (watch the ongoing escalation between U.S. & allies against China)," Mark Luschini, chief Investment strategist at Janney Montgomery Scott said in a note.

New coronavirus cases climbed in all 50 states on Sunday for the fourth day in a row on a rolling seven-day average, a rise not seen since the spring 2020 surge, Stifel said, citing Johns Hopkins University data.

This backdrop of worries has muddied the outlook for growth, prompting a sharp decline in Treasury yields, and pressuring cyclical stocks including financials and energy.

Energy fell more than 4% as U.S. oil prices dropped below $70 level after OPEC and its allies agreed to lift output at time when the delta Covid variant casts doubt on global demand.

The fears on Wall street underscored by a jump in the VIX – or so-called fear index - to a two-month high.

Financials, meanwhile, were pressured by a the fall in U.S. bonds yields, with the 10-year Treasury diving below 1.2% to hit fresh February lows.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) were in the red. 

Lower interest rates hurt banks' net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.

Megacap tech was no exception to the selloff, though fared somewhat better relative to beaten down cyclical stocks.

Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT, Amazon.com (NASDAQ:AMZN) were more than 1% lower.

A sea of red also washed over travel-related stocks, with airlines and cruise stocks sharply lower amid fears rising infections threaten travel demand.

United Airlines Holdings (NASDAQ:UAL), American Airlines (NASDAQ:AAL), Boeing (NYSE:BA) were hit hard, with the latter down more than 5%. While Carnival (NYSE:CCL) slumped 6%.

Fears that some restrictions could return, however, proved a boon for the stay-at-home stocks.

Teladoc Inc (NYSE:TDOC) was up nearly 3%, while Peloton (NASDAQ:PTON) and DoorDash (NYSE:DASH) rose 5%. Zoom Video Communications (NASDAQ:ZM) proved an exception, however, falling about 3% after buying cloud contact center software  Five9 in an all-stock transaction that valued the company at $14.7 billion.

S&P 500 Slumps as Covid Resurgence Rattles Stocks
 

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Comments (19)
Mike Mike
Mike Mike Jul 19, 2021 7:05PM ET
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those who don't get vaccinated, let them die. don't waste medical resources.
Candy Cane
Candy Cane Jul 19, 2021 4:05PM ET
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I don't see anyone slowing down in my neck of the woods. Ppl go out all the time. What I do see since January is no clothes at stores. Department stores have smaller sectioned off departments. I have food allergies so I don't do take out/delivery. I see my neighbors get delivery often.
Larry DeAngelis
Larry DeAngelis Jul 19, 2021 4:03PM ET
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Everyone has to have a reason for a big market move! My reason today is " more sellers than buyers" finally.
Dániel Orlowski
Dániel Orlowski Jul 19, 2021 3:55PM ET
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In 2022 COVID will be history...
Stephen Willis
Stephen Willis Jul 19, 2021 3:32PM ET
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Panic attack if there an increase of the Panic attack, its caused by Biden's actions at border and his spending
gabriel neves da silva
gabriel neves da silva Jul 19, 2021 3:19PM ET
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graeme hughes
graeme hughes Jul 19, 2021 3:13PM ET
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I'm glad to see stupid people still don't understand what this virus is...adjusting the facts to suit their own ends..nothing like the heard mentality to expose ignorance!
chimeremeze chimezie
chimeremeze chimezie Jul 19, 2021 3:13PM ET
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what
Richard Materano
Richard Materano Jul 19, 2021 3:12PM ET
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👍👍
Richard Materano
Richard Materano Jul 19, 2021 3:12PM ET
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yes
Mitchel Pioneer
Mitchel Pioneer Jul 19, 2021 3:08PM ET
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The "late trade" fraud commences.  How much of the loss can they whisk away in an hour this time?
Nico Las
Nico Las Jul 19, 2021 3:03PM ET
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Nobody believes in the virus anymore, it's pure business
Michael Dell
Michael Dell Jul 19, 2021 3:00PM ET
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Its just big money playing games
Install Expert
Install Expert Jul 19, 2021 2:58PM ET
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Blah blah blah... big money devalues small money. Same chit different day. Alerts will go off when it's game time
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jul 19, 2021 2:54PM ET
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Nobody cares about covid
Andres Rodriguez
Andres Rodriguez Jul 19, 2021 2:37PM ET
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Becarfully. Its manipulation and they have excuse for covid. Look the airports, beach. Everything is full. So......
Shriram Raja
Shriram Raja Jul 19, 2021 2:33PM ET
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Also please soon manufacture all varieties of vaccine for each varient . I don't understand, China accepted for all projects then still why economic is not opened . what is your other plans
Shriram Raja
Shriram Raja Jul 19, 2021 2:32PM ET
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Using market preparing world for panic another lockdown . . Nice go ahead
Shriram Raja
Shriram Raja Jul 19, 2021 2:32PM ET
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So I guess next panic is 3rd wave .
Sharma Ayesha singh
Sharma Ayesha singh Jul 19, 2021 2:32PM ET
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Yes
Marco henry
Marco henry Jul 19, 2021 2:32PM ET
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obviously everything is contrived outta this chaos (problem>reaction> solution)...
kim limo
kim limo Jul 19, 2021 2:32PM ET
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nice one
SohEl ParVez
SohEl ParVez Jul 19, 2021 2:30PM ET
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Sharma Ayesha singh
Sharma Ayesha singh Jul 19, 2021 2:30PM ET
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Hello
Dicky Sulistia Ramadhan
Dicky Sulistia Ramadhan Jul 19, 2021 2:30PM ET
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Hai
Mr Liquidator
Mr Liquidator Jul 19, 2021 2:30PM ET
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